Page 24 - Finance for Non-Financial Managers
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                                                                  Counting the Beans
                               The Role of the Finance Department
                               The Finance Department really has two fairly distinct jobs to
                               perform in most companies: managing the company’s financial  5
                               resources (“Finance”) and recording and reporting all its finan-
                               cial transactions (“Accounting”). Many of today’s mid-sized and
                               smaller companies don’t establish separate Finance and
                               Accounting departments within their organizations. A company
                               might instead have a chief financial officer who per-
                               forms or oversees the
                               finance functions for the    Chief financial officer
                               company and oversees the     (CFO) The job title of the
                                                            executive who is in overall
                               company’s accounting
                                                            charge of all the financial department
                               activities. Larger compa-
                                                            activities in all large companies and
                               nies will usually be fairly
                                                            most mid-sized ones. Smaller compa-
                               precise about their organi-  nies might instead place their financial
                               zation and are likely to     department under a vice president
                               have distinctly separate     for finance or even a controller,
                               departments reporting to     depending on how they define the
                               the CFO.                     responsibilities of these people.
                               Finance
                               The Finance Department can be an accumulation of diverse
                               functions, depending on the company. It may oversee such
                               areas as insurance and risk management, contract administra-
                               tion and pricing, internal auditing, investor relations, and more.
                               But at a minimum, Finance will likely be responsible for treas-
                               ury activities, often under an executive carrying the title of
                               treasurer or vice president for finance. His or her role will likely
                               include cash management, bank relations, investments, and
                               everything having to do with making sure the organization has
                               enough cash to do its job and has all its cash busily working or
                               productively invested.
                                   Major activities like mergers and acquisitions, attracting
                               investors to a company seeking outside capital, and internal
                               management of public stock offerings—all traditional roles of
                               Finance—will usually fall within the Finance Department’s
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